Pension fund from inheritance for child

Jessiecurnow77

Hello. I’m hoping someone can help me. 

My son’s father died last year and he has been given a child pension and lump sum from the pension company. He is 15 and they won’t release the lump sum until I find a trust fund for it. I have researched and can only find funds that take up to 9k a year and they won’t realise the money that way. They have suggested I use a financial advisor to find me a suitable account but I personally don’t have the money to finance this. 

At the same time they have been happy to give him a monthly pension of £250 and back pay of 3k direct to his own bank account which is causing problems. I am so worried about his money and making sure he doesn’t waste it all or get into problems with his friends. 

Has anyone else been in this situation and can give me some advice?  

Many thanks. 

wmb194

Jessiecurnow77 said:

Hello. I’m hoping someone can help me. 

My son’s father died last year and he has been given a child pension and lump sum from the pension company. He is 15 and they won’t release the lump sum until I find a trust fund for it. I have researched and can only find funds that take up to 9k a year and they won’t realise the money that way. They have suggested I use a financial advisor to find me a suitable account but I personally don’t have the money to finance this. 

At the same time they have been happy to give him a monthly pension of £250 and back pay of 3k direct to his own bank account which is causing problems. I am so worried about his money and making sure he doesn’t waste it all or get into problems with his friends. 

Has anyone else been in this situation and can give me some advice?  

Many thanks. 

Define what type of trust is acceptable. A children’s savings account can be opened by an adult on behalf of a child and these are usually bare trusts, where the adult acts as the trustee. With these the money will be his at18 (16 in Scotland) so it might not solve the wasting it problem. 

How much is involved? Another option might be setting up a discretionary trust but these are to be avoided if you can help it because they’re far more expensive and complicated.

Albermarle

Normally with an adult  pension, you are not forced to take a lump sum , or not all of it at once anyway.
Depending on the type of pension it could be possible to not take the lump sum at all, and have an increased monthly pension instead.
Has this option or anything similar ever been mentioned ?

Brie

If you are worried about what he might do with the money then the best thing to do is to sit down with him and have a good talk about money, budgeting and finance.  Talk about what a blessing a lump of money might do for him in 10 or 15 years time.  Paying for uni, down payment on a place of his own, money to start a business.  Talk about interest accruing and how that's only possible if the money is in a bank rather than in his pocket.  

Hopefully he will listen.  Maybe he can decide with you about an allowance so he can use a small portion while letting the rest wait for much later.

Jessiecurnow77

Thanks very much. The lump sum is just over £17 k and the monthly amounts are £250. They are insisting on it being a trust fund and I can’t find one that accepts over 9k a year for his lump sum. Any suggestions?  Thanks for your help. 

xylophone

The lump sum is just over £17 k 

Try

https://www.skipton.co.uk/savings/childrens-savings-accounts/childrens-trust-saver ?

You will control the account as Bare Trustee until he is 18.

Once in the account you could move £9000 into a JISA and the balance  into the JISA in following tax year.

Keep_pedalling

You can also open a trust account with NS&I.

Jessiecurnow77

Thanks both. I have to move the whole amount from the pension direct into the trust account. Will either of these trusts accept over 9k in one go?  

DRS1

Don't know about NS&I but the skipton page linked by @xylophone says the upper limit is £50k for that account.

You should check with the pension scheme administrators that it is the (sort of) account they are talking about.

If you are worried about your son squandering money before he is 18 you might ask them if they can pay the £250 pm into that account as well as the lump sum.  How are they paying him at the moment?